Serbian Companies in Restructuring Heavily in Debt

Speaking after a conference on reforming public enterprises in Serbia, World Bank offical Dusko Vasiljevic said Serbia's 153 companies undergoing restructuring owe the state 1.5 billion euro.

"That includes debts to the tax office in unpaid taxes and contributions, debts to the Development Fund, as well as debts to public companies for unpaid electricity, gas, water and public utility services," Vasiljevic noted.

"In some of those companies, the state is the biggest creditor, so any decision to initiate bankruptcy proceedings could be postponed for political reaons," he said.

"However, nearly all those companies also have commercial creditors, who the government cannot put pressure on, so there is always a risk of bankruptcy proceedings being initiated in an uncontrolled way," Vasiljevic added.

The Serbian government needs to ensure that workers get redundancy payments if any of these companies do go bankrupt, he said.

Speaking about possible solutions, Vasiljevic said the government should assess which of the companies might be made profitable and make fresh attempts to privatize them.

The others should go into regulated bankruptcy proceedings during the course of which the workers receive redundancy payoffs.

"At the same time, the state must come up with active labour policy to provide employment for some of the workers who lose their jobs," he concluded.

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